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Hello Mike,
Part (b) requires us to identify and explain the ethical and practice management implication in respect of a recruitment service offered to the clients, and I have the below questions:
1. In the answer, self-interest, familiarity and self-review threat to independence has been identified and explained, however no safeguard has been mentioned for self-interest and familiarity threat. Why? Does it mean that the question doesn’t not ask us to recommend action to be taken by Becker?
Therefore, we do not need to mention safeguards, and just identify and explain is enough? If so, what if I mention safeguard? Can I be awarded mark? or the answer to include safegurad is not relevant and not answering the question asked?
2. If I want to mention safeguard for both threats, please check whether my answer below is correct.
self-interest threat, the safeguard is to fully discose the interest to those charged with governmence and obtain written confirmation from them that they acknowledge the issue.
familiarity threat, the safeguard is to engage an independent accountant to review the audit work performed by Becker.
3. in the answer, it mentioned self-review threat occurs when an audit firm make management decision for an audit client.I get this part, however, it also mentioned the threat is increased with the seniority of the individual being recruited, for example if Becker were to advise on a new finance director?
Why?what is the difference between advising to recurit a senior member and a junior member? Regardless of whether the new recruit is a senior or a junior member, providing recruitment advisory may be perceived as assuming management responsibility as the client might come rely on the recommendation by the firm and make a decison on who to recruit based on the firm’s recommendation. This creates self-review threat to independence and possible safeguard include obtain written confirmation from the management acknowledging all the decision make.
What am I missing?
Thank you.
Marthew
We have a problem here with the available time to read, think, plan, re-read and then write
Available marks are 7 and therefore available time is 12 minutes 36 seconds
Of that, 3 minutes 30 seconds should be devoted to “read, think, plan, re-read” so now you have only 9 minutes and 6 seconds to write out your 7 mark-earning points
The question asks you to “Identify and explain the ethical and practice management implications …” for the suggested recruitment service
There are 4 sub-topics to be addressed:
Identify ethical
Identify practice management
Explain ethical and
Explain practice managementSo, 4 sub-sections within the requirements
Within “Identify ethical …” you have:
Self-interest
Familiarity and
Management involvementJust with a very simple application of logic, that’s 3 ethics identifies, 3 ethics explains, 3 practice management identifies and 3 practice management explains
so, 12 points … and you need 7
With only 9 minutes and 6 seconds you have to write out 7 mark-earning points and that equates to 1 minute 18 seconds per point / sentence / paragraph
So maximum sentence length of 3 lines to write 21 lines in total to grab 7 marks
And you want to bring in safeguards as well?!!!!
The only time, I suggest, that you would bring in safeguards would be where you can’t dream up 7 different relevant points for the “identify and explain” part – and I stress ‘relevant’
Does that help?
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